Why Do Businesses Hire People?

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I think maybe my next blog is going to be about what I'm learning about blogging! Resisting the impulse to respond to all of the heated rhetoric of the past week, I'll instead stick to the topic du jour ... namely, the reasons we had to let people go. To really address this issue, I thought it would be beneficial to take a step back and explore why people are hired in the first place.

I don't know about other companies, but every time I've ever hired someone to work here, it was because I fully believed I'd be able to make more money with them than without them. In other words, if I pay someone $1 to do something, I expect to make $2 from their efforts or services. It's really that simple! Unfortunately my crystal ball is sometimes blurry, the economy doesn't always cooperate, and I've even been known to invest in ideas expecting future business that somehow doesn't materialize according to my expectations.

For an employee, this same principle holds true in reverse. An employee needs to find a job that pays enough to meet basic needs and also leaves money for discretionary spending. Individuals call this "extra" money, while business owners call it "profit." The employer and employee enter into a relationship for an identical economic need, which is to acquire "extra" money after all the basic needs have been met. No employer starts out intending to just break even, and job hunters always try to find a job that pays more than they need to survive.

What all of this means to employees and owners alike is employment should be viewed as a means to a common end. I will help you realize your dreams and goals associated with employment, such as salary, raises, job satisfaction, security, and benefits, if you will help me realize my dreams and goals, too. If I fail to do my part and am forced to let someone go, then we both lose. Likewise, we also both lose if an employee fails to do his or her part.

When I hire somebody and then have to let them go, I have failed you and I have failed me. The sales we anticipated just didn't happen despite all the time, energy, planning, and money we invested. For those of you who question whether I, as the owner of the company, lose money when sales fall short and budget cuts are necessary, isn't the answer obvious? Of course I do.

But 2008 is a new year and represents a new beginning. We have budgeted for exciting new initiatives, and we could not be more optimistic about the future. I started this company in 1991 with a vision, with passion, and with optimism, and that is exactly how I feel entering 2008. We are forecasting year over year growth in both profit and revenue. The 2008 possibilities are endless!

Last updated: Dec 13, 2007




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